VAT documentation and compliance
With the Value Added Tax becoming effective on 16th April 2021, corporates will witness new documentation and compliance requirements particularly for invoicing and book keeping. Some of key highlights of the VAT law are being discussed as below:
Tax Invoice:
Taxable Person registered with the Tax Authority must issue a Tax Invoice when making a supply of Goods or Services including a Deemed Supply.
The tax invoice can be issued in local currency (OMR) & foreign currency also, but for the foreign currency the exchange rate should be the average rate provided by the Central Bank of Oman.
The tax invoices should be in accordance with the format provided by the tax authority. Tax authority issued the format of comprehensive tax invoice but simplified invoice format with the minimum requirements is yet to be announced by the tax authority.
Book keeping and records:
Every registered taxable person will have to maintain proper records – including details of tax invoices, customs documents, accounting books plus for import and export transactions.
All the accounting records & books must be maintained in the local currency (OMR). The taxable person can maintain accounting records or books in a foreign currency after receiving a written approval from the Tax Authority.
The Taxable Person shall retain tax invoices, accounting records and books, and customs documents related to the import and export of Goods and any other documents that are related to specific tax return submitted to the tax authority for the 10 years following the end of tax year in which tax return was filled.
The aforementioned time period extends to (15) years for related to real estate sector.
Requirements of tax return:
The tax authority will determine the tax period for the taxable person to file a tax return. Currently, the registration are happening and the Tax Authority is issuing Tax certificates for quarter starting 16th April 2021 to 30th June 2021 as the first tax period. The due dates for filing the return is 30 days following the end of the tax period.
The tax return form shall specifically include the following details:
- The value of taxable and exempt supplies.
- The value of imported goods.
- Value of Output Tax during the Tax Period for which the return is prepared, and value of Input Tax claimed.
- The value of Tax due during the Tax Period for which the return is prepared.
If the return is not submitted within the specified time, the Authority has the right to assess the Tax for the Tax Period, and notify the Taxable Person of the assessment with the basis thereof and in accordance with the Regulations. The tax return format is yet to be released by the tax authority.
Amendment to tax return:
(a) Amendment by the taxable person: A Taxable Person shall file a revised Tax Return within (30) thirty days once he becomes aware of an error or omission in the Tax Return he submitted. The revised return will be considered as original return. In all cases, the Taxable person is not allowed to adjust the Tax Return if the Authority has proceeded with the tax inspection procedures in its respect.
(b) Amendment by the Tax Authority: The Authority shall adjust the Tax Return submitted by the Taxable Person, if it is made aware that it contains an error or omission or it is insufficient. A Tax Return shall not be adjusted after (3) years from the date of submission. The period shall be extended to (5) years in cases of proven fraud or following fraudulent means.
The Executive Regulations are still awaited and the same will have more details and clarification with regards to forms, formats and documentation. It is advisable to corporate to assess these requirements and start implementing the same in the business processes.
